My small business clients (a retailer with less than 200 employees) express concern over their limited resources. The marketing function is usually the last position to be hired – way after sales and operations. Usually someone from the technology side sets up online campaigns. There are two problems with this approach:
- it takes a lot of time and patience to set up various campaigns, especially search engine marketing
- reports are complicated and most business owners feel they don’t have sufficient in-house knowledge.
What is a small business to do where there is one person in a role of customer service specialist/creative marketing manager/graphic designer/SEO and SEM specialist/marketing analyst? Of course they can outsource marketing to an agency, but there are some practical concerns:
- Cost: The agency typically making 7-10% on the ad spend, there’s always the lingering concern that there is a bias to high cost campaigns.
- Lack of clarity and/or transparency: Performance reports come from different advertising media (eg. Bing and Google). They often double-count sales. Often, the impact of affiliate channels is unknown.
- Complexity of reports: The workhorse for most retailers is Google Analytics. It’s a general purpose solution but it’s difficult to customize the reports and criteria. Most retailers do not have anyone on staff who is so technically skilled and has the time to do this.
- No linkage between online marketing and phone sales: For a lot of my clients service is key to their success. They aren’t selling a commodity that can be bought on Amazon or eBay. They usually have niche products and/or a loyal community. The customers may do their research online but complete the sale on the phone. This is a glaring blind spot for many.
So the path for small retailers is to manage the marketing in-house or to establish checks so they can independently audit the work of their agencies. If you agree so far, then continue reading.
Scope of discussion
There are some areas I will not cover:
- Creative set-up. I will not cover the content, imagery and offer you need to use to incentivize shoppers to come to your website. That is the art of marketing. If you are running the business, you have a far deeper understanding on what shoppers want than anyone else outside the business. I will not get into that.
- Advertising technology set up. I will not cover setting up Google Adwords, Bing Ads, Display networks, email marketing etc. There is enough content on the Interweb to guide you.
- Technology decisions: I also cannot comment on tactical decisions such as Criteo vs Quantcast or Bronto vs Silverpop although the principles below will tell you the relative performance of each channel.
The discussion below covers three elements of a measurement dashboard to guide the busy retailer in their marketing spend.
- Shopping funnel: “Where is the business today? What’s busted?”
- Channel rating: “What’s working? How well? Can I redirect spend?”
- Campaign rating: “How do I adjust my search, email campaigns?”
*If this seems like a plug for our in-house solution Polytab attribution, you are right. It is. At pricing from $20/month , it’s the best answer for any retailer who wants to grow sales without breaking the marketing budget. However, the general principles below are not tool dependent.
1. Check the state of the shopping funnel & identify bottlenecks
Shoppers flow through distinct stages on the path to purchase. [See definitions here. ]
- Awareness: Gain brand awareness
- Conversation: Engage in conversation
- Shopping: Shopping triggers
- Loyalty: Loyalty or repeat visits
The channels and the messages that influence them at each stage are very distinct.
Action: Take a snapshot of your marketing funnel and review the numbers at least every month. You may see if you need to work on (say) brand awareness or other choke points further down on path to purchase.
2. Assess each channel’s performance & move budget as needed
Recognize that there’s a difference between marketing and sales. Not all channels that feed the shopping funnel lead to a sale. It is important to have the following measures per channel.
- Shopper count : Measure how many shoppers (purchasers or otherwise) touch a particular channel over the specific time period, and how many times. This gives you a sense of the traffic you are gaining using the specific channel.
- Purchase count: Measure how many shoppers who touched that channel made their first purchase in due course of time. Also estimate the Purchaser % associated with this channel.
- Purchase interval : This is an essential metric. It gives you guidance on the average time it takes to convert a shopper. You may also want to look at the median time to purchase.
- Sales attribution %: This is a technical measure but you need to estimate how much of your sales could be attributed to a specific channel. Note that the same shopper could have touched multiple channels on the path to purchase. Sales attribution % for a channel CANNOT be larger than the Purchasers %
- Costs $ or %: Estimate the costs $ per channel. Also estimate the % relative to total marketing costs.
- Repeat purchaser %: measure the % of repeat purchasers for each channel.
Action: Invest in channels where the sales attribution % is over-indexed relative to costs %
Action: If the costs % to sales attribution % are comparable, consider investing in channels with the shortest time to purchase, or higher repeat purchaser %.
3. Assess each campaign’s performance & tweak as needed
Measure the same attributes as above, but at the campaign level for Google Adwords, Bing Ads, Yahoo/Gemini ads and Email campaigns.
- Shopper count
- Purchase count
- Purchase interval
- Sales attribution %
- Costs $ or %
- Repeat purchaser %
Action: Move budget to campaigns where the sales attribution % is over-indexed relative to costs %
How to get the complete view of the shopping funnel?
According to D. Anthony Miles, CEO and Founder, of Miles Development Industries Corporation, “the number one way to measure marketing effectiveness it would be two things: Marketing Metrics and Predictive Analytics”. Both of these things fall under the hood of Infernotions with a fraction of cost. The Polytab.com attribution app provides a complete view of all, literally ALL, campaigns and channels you use for marketing and sales (phone and catalog including) and Infernotions predictive modeling provides an understanding of what works best, thus where should you focus your marketing budget.
Feel free to sign in as guest and see the interface.